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Forecasting 2008: AMD Apologist Analyst Day

AMD presented its projections for 2008 in the company's annual Financial …

AMD held its annual Financial Analyst Day this morning. This time around, there was no glitter, no flash, and no rosy pep talks about the current (or future) dominance of AMD products in the marketplace. The various corporate executives who spoke, including Hector Ruiz (CEO), Mario Rivas (executive vice president, Computing Products Group), and Dirk Meyer (president, chief operating officer), acknowledged the difficulties AMD is currently experiencing, admitted that the company's execution had slipped badly over 2007, and pledged that 2008 would be different. AMD's word of the day was "apologize," and multiple executives expounded on the theme. Future-casting was kept to a bare minimum, and most of the information discussed is already common knowledge in technical circles.

That's not necessarily a bad thing given AMD's current financial position and the company's desire to strike a different tone with the financial industry. Admitting the truth of where it stands and the need for change paints the company as an honest one that's willing to give real information on its operations, even when that information isn't good. The best way to follow up on such statements, however, is to deliver realistic good news about what's expected in 2008. Unfortunately, that didn't really happen, and the statements and projections AMD didn't make resonate more strongly than those it did.

According to AMD, platform-based solutions will remain a major focus for the company thanks to strong demand for them from its customers. Sunnyvale also gave some hard numbers on current quad-core shipments, stating that it shipped 34,000 Barcelona cores in the third quarter, expected to ship "hundreds of thousands" by the end of the fourth quarter, and would double Q4 shipments in the first quarter of 2008. The company also clarified what the exact state of Barcelona shipments is at the moment. Barcelona parts are shipping, but only to specific customers, and only in situations where AMD is able to work with the company to ensure that the TLB erratum will never be encountered. Phenom shipments will continue, but major OEMs aren't expected to offer complete systems based around the part until the end of the first quarter or the beginning of the second. This implies that most manufacturers are largely passing on Phenom until its TLB erratum is completely resolved, though AMD did not make that particular correlation.

AMD projects that it will ship Phenom and Barcelona parts in a 3:1 ratio through the first quarter of the year. Around the end of Q1/beginning of Q2, the new "B3" stepping of the K10 core should be available in volume. Once this occurs, Barcelona production and availability will be ramped, and the processor will be made available in volume to Fortune 500 companies.

That's basically all AMD had to say about Barcelona and K10. While the tone of the meeting would've made aggressive rose-colored predictions unpalatable, AMD's decision to say so little about what we can expect from K10 in 2008 was surprising. The company did discuss its transition to 45nm process technology, stating that samples were set to be delivered in January, with volume ramp beginning in the second half of 2008, but that projection is short enough to raise some eyebrows; it'll be surprising if AMD can switch to 45nm that quickly. AMD is working on a 45nm, octal-core K10.5 with 6MB of L3 per cache and an MCM approach (two quad-cores per die), but the die itself has not been produced on actual silicon—at least not yet.

Good vibes on ATI

ATI was the only real bright spot of the day. That particular segment of AMD is downright bullish in its expectations for 2008, and intends to challenge NVIDIA in the mid-range and high-performance desktop segments while simultaneously retaking market share in the notebook segment. New midrange and budget GPUs based on the RV620 and RV635 will be available in the first quarter of next year, and the company's RV680 (dual X3870 GPUs on one PCB) should debut relatively early in the year as well.

ATI also announced two new capabilities that will come with next-generation video cards and integrated chipsets. Going forward, integrated chipsets built on the 780G platform will be able to increase overall video performance by plugging in a budget or midrange GPU that will work in concert with the already integrated GPU to boost performance. Think of the combination as a weak Crossfire solution, but one that actually makes some sense; integrated users who upgrade to even a budget GPU will see a greater performance boost than they previously would've. ATI hasn't revealed much about this technology yet, but the company claims that it will function best with lower-end cards. As performance becomes increasingly asymmetric between the integrated GPU and the discrete part, the overhead created by enabling Crossfire inevitably overwhelms the advantage of using it.

The other announcement from ATI today is that it will begin shipping DisplayPort capable cards this year. DisplayPort is designed as an alternative to HDMI, and uses fiber optic cable rather than twisted copper. This allows a display to use a much longer signal cable before image quality begins to degrade. There are no DisplayPort-capable monitors shipping at this time, but various companies including Dell, Samsung, IBM, and Lenovo have all said that they will be adopting the standard in the future.

If not for ATI's recent resurgence, AMD's event today would've come across as downright depressing. AMD's presentations and speeches were meant to demonstrate both an acceptance of the company's current position as well as a determination to turn things around and put the CPU manufacturer back on track. Unfortunately, neither determination nor admission of accountability are easily converted into cash. Today's event didn't seem to be the work of a company that's expecting much good news in the fourth quarter, and the lack of information on upcoming K10 improvements cast doubt on that processor's ability to carry the company financially.